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Updated: New Overtime Rule Appears To Be (Permanently) Shelved


As many readers are likely aware, during the Obama administration, a new overtime rule was introduced which would have resulted in massive increases in salary for many workers across the country.  Under the proposed regulation, it would have required employers to pay overtime to workers that earned less than $47,476.00 per year (up from the current "cut off" of $23,660.00 per year).  Critics of this proposed increased argued it would decimate the labor market, result in an increase in costs passed on to consumers, and place a tremendous burden on employers.

Shortly before the overtime rule was set to take place (on December 1, 2016) a preliminary injunction was issued by a Federal Court Judge in November of last year which put the overtime rule on hold.  (Interesting to note that the Judge, Amos Mazzant, had been appointed by President Obama).  After President Donald Trump took office, the Department of Labor appeared willing to back away from defending the overtime rule.  (Note, this was contrary to the Obama era Department of Labor which "strongly disagreed" with the issuance of the injunction).

In recent weeks, Judge Mazzant granted summary judgment in favor of the business plaintiffs that sought the injunction.  Shortly thereafter, the Department of Justice asked the Fifth Circuit to dismiss an appeal (in regard to the injunction and enforcement of the overtime rule) as the granting of summary judgment by Judge Mazzant rendered the appeal moot.

At this point, the new overtime rule proposed by the Obama administration appears to be permanently off the table.  The question then turns to what (if anything) the Trump administration would do to raise the overtime threshold.  Time will tell, but many scholars that closely follow the matter expect there to at least be some increase in the overtime threshold (although likely much lower than what had previously been proposed during the Obama administration).

Stay tuned.

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